IMPORTANT POINT
The court's decision was based on the interpretation and application of the Income Tax Act provisions related to disallowance under Section 14A, deletion of expenses under Section 37(1), and the treatment of software charges as revenue or capital expenditure.

JUDGMENT

[Physical Hearing/Hybrid Hearing (as per request)]

Rajiv Shakdher, J. (Oral)

CM No.53514/2023 [Application filed on behalf of the appellant seeking condonation of delay of 288 days in re-filing the appeal]

1. This is an application moved on behalf of the appellant/revenue seeking condonation of delay in re-filing the appeal.

1.1. According to the appellant/revenue, there is a delay of 288 days in re- filing the appeal.

2. For the reasons given in the application, the prayer seeking condonation of delay in re-filing the appeal is allowed.

3. The application is disposed of, in the aforesaid terms.

ITA 579/2023

4. This appeal concerns Assessment Year (AY) 2012-13.

5. Via the instant appeal, the appellant/revenue seeks to assail the order dated 30.03.2021 passed by the Income Tax Appellate Tribunal [in short, "Tribunal"].

6. The appellant/revenue has proposed the following questions of law for our consideration:

"A. Whether on facts and circumstances of the case and in law, Hon'ble ITAT has erred in deleting the disallowance of Rs 20,84,878/- u/s 14A r/w Rule 8D of the Income Tax Act 1961?

B. Whether on facts and circumstances of the case and in law, Hon'ble ITAT has erred in deleting disallowances of expenses of Rs. 1,89,45,379/- u/s 37(1) of the Act?

C. Whether on facts and circumstances of the case and in law, Hon'ble ITAT has erred in deleting disallowance made on account of depreciation for Rs 32,12,253/- on software licences @ 25% by relying on the earlier order and without assigning any specific reasons?

D. Whether on facts and circumstances of the case and in law, Hon'ble ITAT has erred in deleting the addition of Rs 1,34,48,062/- on account of Software expenses by treating it as Revenue Expenses."

7. It is not disputed by Mr Puneet Rai, learned senior standing counsel, who appears on behalf of appellant/revenue that the proposed question "A" stands covered by the decision of the coordinate bench rendered in Cargo Motors (P.) Ltd. v. Deputy Commissioner of Income-tax, [2022] 145 taxmann.com 641 (Delhi).

8. The proposed question "A" concerns the manner in which disallowance under Section 14A of the Income Tax Act, 1961 [in short, "1961 Act"] read with Rule 8D of Income Tax Rules, 1961 [in short, "1962" Rules] is to be calculated. In other words, whether only investments made to earn exempt income should be taken into account excluding other investments while calculating the disallowance.

9. Via the aforementioned decision, the coordinate bench has ruled that the disallowance calculated under Rule 8D of 1962 Rules should factor in only investments made by an assessee to earn exempt income. Therefore, the said proposed question of law need not be considered by us.

10. Insofar as proposed question "B" is concerned, the same is also covered by a coordinate bench judgment rendered in the respondent/assessee's case in Pr. Commissioner of Income Tax-9 vs. Times Internet Ltd. 2017:DHC:5197-DB.

11. To be noted, the Commissioner of Income Tax (Appeals) [in short "CIT(A)"] had deleted the disallowance amounting to Rs.1,89,45,379/-. The CIT(A), in this regard, followed the decision of the Tribunal in respondent/assessee's case concerning AY 2006-07 to 2008-09.

12. Significantly, the decision of the coordinate bench in Pr. Commissioner of Income Tax-9 vs. Times Internet Ltd. 2017:DHC:5197-DB relates to the said AYs. The coordinate bench confirmed the view taken by the Tribunal, which has been adopted by the CIT(A) in the instant appeal and like for the aforementioned AY, in the instant case, the said decision has been confirmed once again by the Tribunal. For convenience, the Tribunal's view, as adopted by CIT(A), in the instant case is set forth hereafter:

"3.1 I have considered the submission of the appellant and order of the AO. The issue involved is that AO has made disallowance of Rs. 18945379/- on account of that part of the expenditure incurred and claimed is not related to the business/sales contents of other group companies. The AO has re